This video, widely shared on WhatsApp, highlights how IndiGo has achieved operational efficiency through several innovative measures.
From prioritizing punctuality, thereby increasing aircraft flying time, to weight-saving initiatives like removing ovens and hot food service, every decision reflects a focus on maximizing efficiency. Even their recruitment of only female cabin crew—lighter than their male counterparts—is a deliberate strategy to save on fuel costs.
These measures have paid off. Over the past decade, IndiGo has captured over 62% share of the Indian market.
As an aside, Southwest Airlines in the US was the pioneer of such a strategy. Do read one of my favourite management classic “NUTS”, which provides insights into the founder Herb Kelleher’s thinking.
Grounded Reality
While IndiGo excels in the skies, there’s a glaring inefficiency on the ground waiting to be addressed.
India remains one of the few countries where airlines operate their own ground handling infrastructure, with airlines like IndiGo even using custom-built boarding ladders.
Why should airlines be investing in and operating ground handling equipment at all? Couldn’t this be managed by private airport operators or outsourced to specialized companies? The cargo-handling sector has already adopted this model successfully—why not extend the same logic to passenger services?
₹300 Crores Locked in Non-Core Assets
IndiGo’s Annual Report reveals a significant ₹300 crore investment (post-depreciation) in Ground Support Equipment and Motor Vehicles relating to Ground handling. This is a substantial sum tied up in non-core operations.
By outsourcing these functions to a specialized operator, IndiGo could free up this capital for growth and innovation in their core operations. The following economies of scale benefits can accrue to the system as a whole:
- Lower equipment and spares procurement costs
- Reduced operational expenses: Maintenance and staffing costs will be spread across multiple airlines.
- New revenue opportunities: Centralized advertising on ground handling equipment, which is currently non existent.
Actually this isn’t just an opportunity for IndiGo but for the entire industry and requires a policy intervention with a potential to unlock over ₹1000 crores in locked up capital across all the airlines.
For a country that has successfully privatised airports, why is passenger ground infrastructure not yet privatised ?
Hari’s Curries
A Buffet of Reflections